> more innovative, producing more patents per employee than large firms

Patents are not correlated with innovation. Tons of innovative things are never patented, and the majority of patents are largely bullshit. The patent system mostly gives tons of money to patent lawyers and power to companies who know how to use their patents to threaten innovators.

It may be true that small businesses are more innovative, but we simply can't use patents as a measure of innovation.

I happen to agree with the rest of your comment.